In an Accidental Death and Dismemberment policy with a principal sum of $50,000, what is the maximum amount an individual can receive for losing a finger?

In an Accidental Death and Dismemberment (AD&D) policy, the principal sum is the total amount payable for certain types of losses. When it comes to specific dismemberment benefits, the policy typically outlines what percentage of the principal sum is paid for different types of injuries.

In many standard AD&D policies, losing a finger usually results in a benefit that is a fraction of the principal sum. A common structure is that the loss of a finger may entitle the insured to receive a specific portion, such as 10% of the principal sum. Given the principal sum of $50,000 in this scenario, 10% would equate to $5,000 for the loss of a finger. When two fingers are lost, the payment could increase, but for losing a single finger, the amount tied to the benefit is $5,000.

In this context, the amount of $25,000 may align with a more significant loss, such as the loss of a hand or foot, which explains why it represents a notable fraction yet is not the correct amount for the loss of a finger. Understanding how these percentages correlate with the principal sum is crucial in navigating AD&D benefits effectively.